Under Sections 23(4) and 37(12) of the Singapore Income Tax Act 1947, a company’s ability to carry forward or carry back unutilised trade losses, capital allowances, and donations is contingent upon meeting the continuity of ownership requirement. A waiver of this requirement may be granted by the Minister or the Comptroller only where a substantial change in shareholders arises from:
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Genuine commercial reasons unrelated to obtaining a tax benefit or advantage;
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Nationalisation;
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Privatisation of a government-owned enterprise; or
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The listing and trading of the company’s or its holding parent’s stock on a recognised stock exchange.
Key Change in Administrative Procedure
The Inland Revenue Authority of Singapore (IRAS) has replaced the previous letter-based application process with a mandatory online form titled “Application for Waiver of Shareholding Test.” This new application channel was formalised on the IRAS website on 31 March 2026.
Implications for Tax Accountants and Entities
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Mandatory Use of Prescribed Form: Taxpayers and tax agents can no longer rely on informal correspondence or general submission letters to request a waiver. Applications submitted outside the new online portal are unlikely to be processed. Practitioners should update their internal checklists and compliance procedures accordingly.
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Risk of Procedural Disallowance: Where a substantial change in shareholding has occurred and a waiver is required, failure to use the prescribed online application may result in the disallowance of unutilised items carried forward or back. This has direct cash flow and tax liability implications for the relevant year of assessment.
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Documentation and Substantiation: The shift to a structured online form suggests IRAS is formalising the evidentiary requirements. Companies should anticipate the need to upload supporting documentation demonstrating that the substantial change falls within the statutory grounds (e.g., evidence of genuine commercial rationale, stock exchange listings, or privatisation agreements) at the point of application.
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Practical Consideration for Transactions: For mergers and acquisitions, corporate restructurings, or initial public offerings occurring on or after 31 March 2026, the waiver application process should be factored into transaction timelines. Unlike the prior letter-based regime, the new online process may impose standardised submission windows or require specific authorisations from company officers.
Conclusion
The IRAS’s adoption of an online application form standardises the processing of waiver requests under Sections 23(4) and 37(12). Tax Accountants should submit all applications via the designated portal with complete supporting documentation to prevent administrative delays or the disallowance of carried-forward tax attributes.
Source: IRAS website, 1 April 2026